Market Trends of Southeast Asia Oil and Gas Downstream Industry
This section covers the major market trends shaping the Southeast Asia Oil & Gas Downstream Market according to our research experts:
Refining Sector to Witness Growth
- Southeast Asia is home to some of the fastest-growing economies. The cumulative population is expected to grow by 13% by 2030, with the region's GDP doubling in the same period.
- In recent years, the region witnessed an increase in oil refining capacity. Many construction and expansion projects are planned in major countries like Thailand, Singapore, and Malaysia, including the Pengerang Energy Complex and Sipitang Oil & Gas Industrial Park (SOGIP) in Malaysia, the Sriracha refinery expansion in Thailand, and the expansion of integrated manufacturing complex in Singapore by ExxonMobil.
- According to the BP Statistical Review of World Energy 2022, Singapore had the largest refining capacity of 1,461 thousand barrels daily as of 2021, followed by Thailand, Indonesia, Malaysia, Vietnam, and other Southeast Asian countries.
- Southeast Asia has been witnessing increasing investments in the oil and gas downstream industry, with Indonesia, Malaysia, and the Philippines being the regional fueling hotspots. For instance, in October 2022, the Indonesian national energy company Pertamina intended to invest up to USD 50 billion in the country's refinery sector. Approximately USD 24 billion will be spent on a greenfield refinery that will be built in East Java province in collaboration with the Russian state energy company Rosneft. The refinery will occupy an area of 840 hectares in Tuban Regency, and there will be 14 refining units for vehicle fuels and seven for petrochemicals.
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Vietnam Downstream to Witness Growth
- The country has been long dependent on the import of refined oil from countries like India and China, which have a robust downstream sector. To reduce the dependence on refined oil imports and supplement the growing Vietnamese upstream industry, the Government of Vietnam initiated the expansion of the downstream sector.
- Increased investments in the country will also support the growth of the market. For instance, in December 2021, Essar jointly invested USD 300 million in Vietnam's offshore hydrocarbon block. Thus, increasing oil and gas production will likely support the market's growth during the forecast period.
- In April 2022, Binh Son Refining and Petrochemical of Vietnam announced an investment of USD 1.2 billion to renovate and expand its Dung Quat refinery, increasing its processing capacity to 7.6 million tons of crude oil per year from 6.5 million tons.
- In Vietnam, oil consumption increased to 464 thousand barrels daily in 2021 from 397 thousand barrels in 2014. Increasing demand and increasing oil consumption are boosting the market's growth.
- Hence, the Vietnamese downstream industry is expected to witness substantial growth during the forecast period. New proposed agreements and expansion in the refineries and petrochemical plants are expected to be prominent drivers in the Vietnamese downstream industry.
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